Sports & Entertainment Beat

We often hear about Tommy John surgery for baseball players, and it may be becoming more commonplace.  For example, several pitchers for the New York Yankees have undergone the procedure in recent years.  In general, Tommy John surgery is a medical procedure to repair a torn ulnar collateral ligament (UCL) in the medial elbow.  Before the procedure was developed, the injury was considered career-ending. These days, talented pitchers who undergo the surgery often become top flight pitchers once again.

As the surgery has become more commonplace, so too have patents and patent applications referencing the surgery or the injury it was designed to treat.  Various types of businesses have been able to identify opportunities related to UCL tears and surgical repair of the injury, many of which are ancillary to the surgery.

With high-profile deaths of iconic NFL players such as Junior Seau and Dave Duerson making headlines over the past couple years, the long-term health and well-being of NFL players has come to the forefront as the hot topic of the day.  Nowhere has this issue gained more notoriety and exposure than in the series of lawsuits filed against the NFL by retired players.

When UCLA basketball star Ed O’Bannon saw his avatar used in an NCAA-branded video game for which he received no compensation, he decided to take action, and agreed to serve as lead plaintiff in a class action challenging NCAA rules prohibiting student-athletes from receiving a share of revenues earned from use of their names, images and likenesses.  The suit alleged that the restrictions constitute an unreasonable restraint on trade in violation of antitrust laws.

On Thursday, the NCAA Board of Directors voted to allow Notre Dame and the top five conferences in Division I - Atlantic Coast, Big Ten, Big 12, Pacific-12 and Southeastern Conferences (collectively known as the “Big 5”), to create their own rules in the following 11 areas affecting student athletes (the “Autonomy Measures”):

• Athletics Personnel;

• Insurance and Career Transition;

• Career Pursuits Unrelated to Athletics;

• Recruiting Restrictions;

• Pre-Enrollment Expenses and Support;

• Financial Aid;

• Awards, Benefits and Expenses;

• Academic Support;

• Health and Wellness;

• Meals and Nutrition; and

• Time Demands.

The decision of a Los Angeles probate judge on Monday, July 28, 2014, provides a glimpse into the private lives of owners of an NBA franchise.

Judge Michael Levanas, in the Sterling Family Trust matter, evaluated the testimony of both Shelly Sterling and Donald Sterling, found Mrs. Sterling to be more credible and issued a tentative oral ruling giving her authority to move forward with the sale of the Los Angeles Clippers for $2 billion to former Microsoft CEO Steve Ballmer. Mrs. Sterling entered into the sale as the sole trustee of the Sterling Family Trust.

In a 2-1 ruling last Wednesday, June 18, the Trademark Trial and Appeal Board (TTAB) of the United States Patent and Trademark Office (USPTO) resolved an opposition proceeding in favor of five Native American plaintiffs who sought to cancel six trademark registrations that contain the word REDSKINS and are owned by Pro Football, Inc., the owners of the National Football League’s Washington, D.C. team.

Website owners are battling or quietly settling an increasing number of copyright infringement claims for images posted without permission.  To avoid such claims, webmasters should be careful to make sure they have the proper permission from the copyright owner.  Just because an image is on the Internet and easy to cut and paste from another website, Facebook, Twitter, or other social media sites does not mean it can be re-used without permission. Images are protected even if they do not display the symbol ©. Save yourself headaches and legal fees by first going through the proper channels to obtain the clearances you need to use others’ images.  This article focuses on copyright issues but depending on how a photograph is used on your website, other permissions may be needed.  For example, publicity rights laws may require that you obtain permission from the people in the photograph, and trademark laws may require permission from the owner of any logo or branding appearing in the photo.

Professional athletes spend considerable time working with sports equipment.  Baseball players, for example, use different types of shoes, various protective equipment (such as helmets), devices to block the sun (such as bills of hats), and devices to otherwise improve performance (such as batting gloves to better grip a bat).  In part because of the time they spend using such equipment, and the time they spend on a field or court in front of a large crowd, not to mention the impact equipment can have on their athletic careers, professional athletes can recognize the desire for improved equipment to meet a need and can envision such improvements.  In at least a few situations, professional athletes have conceived of new ideas and have applied for and received patent protection for their inventions.

The National Labor Relations Board (“NLRB”) ruled on March 26, 2014 that Northwestern University football players who receive scholarships from the University are employees of the University and are eligible to unionize.

The NLRB cited several reasons for its decision, including that the University benefits from the players’ services through the compensation it receives for those services in the form of advertising, sponsorships, media buys, ticket sales, etc.  Additionally, it found that the University controls how and when the players perform their services and that these football players receive compensation for their services in the form of scholarships. The NLRB determined that football players receiving scholarships from the University are not “primarily students” and that their activities are rather economic ones that benefit the school.

As a general rule, in accordance with IRC § 61, the value of any prize or award a taxpayer receives is subject to taxation. Internal Revenue Code (IRC) §§ 74 and 117 provide limited exceptions to this general rule.

IRC § 74 specifically excludes from the income of the recipient certain employee achievement awards and certain prizes or awards transferred to charitable organizations prior to receipt. IRC § 117 specifically excludes from the income of the recipient “qualified scholarship” proceeds. These exceptions are subject to rigid qualifications.